Blue Nile execs sell $78.7 million in stock

Company leaders seek to 'diversify'

By CRAIG HARRIS, P-I REPORTER

Published 10:00 pm, Tuesday, November 6, 2007

Blue Nile Chief Executive Mark Vadon and five other executives at the Internet jeweler have sold a combined 1.16 million shares for $78.7 million as the company's stock price has skyrocketed this year.

Vadon, the company founder, sold 897,298 of his shares for $62.8 million, according to filings with the Securities and Exchange Commission. The selling, which began Jan. 4 and ran through Aug. 31, dropped Vadon's holdings from 1.4 million shares to 508,556 shares.

Vadon, who has an annual salary of $385,000, said Tuesday he was diversifying his holdings.

The executives, like other shareholders, have benefited from the company's upward share price throughout the year as Blue Nile has beat Wall Street's estimates.

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"During the past year, members of Blue Nile's executive team have sold stock to diversify their personal holdings," the company said in a statement. "Most members of the executive team have been with the company for most or all of its eight-year history and collectively hold ownership interest representing over 10 percent of the company's fully diluted shares outstanding."

On Tuesday, before third-quarter earnings were released, the stock price closed at $74.68 on the Nasdaq stock market, and it had more than doubled since the beginning of the year. The price increased more than 12 percent in after-hours trading.

The stock hit a 52-week high of $106.16 on Sept. 21.

Most of the trades by Blue Nile executives were part of a 10b5-1 plan, which allows officers to structure programs without running afoul of insider trading prohibitions.